Business Innovation and Commercialisation: Essence Drinks Report

This report provides a comprehensive analysis of innovation and commercialization strategies, focusing on the case study of Essence Drinks. The report explores the definition and importance of innovation in comparison to invention, particularly within the context of a business aiming for growth and competitive advantage. It examines how organizational vision, leadership, culture, and teamwork shape innovation and commercialization processes. Furthermore, the report delves into the 4Ps of innovation (Product, Process, Position, and Paradigm) and the use of the innovation funnel to shape innovative ideas, as well as the application of frugal innovation, with examples of its use in an organizational context. The report also discusses the commercialization funnel, the process of New Product Development (NPD), and the creation of an innovation business case. The report concludes by highlighting the importance of protecting knowledge and ideas within an organization. This report offers insights into how Essence Drinks can improve its business.

Innovation and
Commercialisation

Table of Contents
.........................................................................................................................................................3
INTRODUCTION ..........................................................................................................................4
TASK 1 ...........................................................................................................................................4
P1 Explain innovation and determine its importance to organisations in comparison with
invention......................................................................................................................................4
P2 Explain how organisational vision, leadership, culture and teamwork can shape innovation
and commercialisation................................................................................................................6
TASK 2............................................................................................................................................7
P3 4Ps of innovation and use of innovation funnel to examine and shape innovation ideas......7
P4 Explain developments in frugal innovation and provide examples of how it is used in an
organisational context.................................................................................................................9
TASK 3 ...........................................................................................................................................1
P5 Importance of commercial funnel and process of New Product Development for
innovation ...................................................................................................................................1
P6 Innovation Business Case......................................................................................................2
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Every organisation wants to attain high growth and success and for this it requires to
fulfil the different demands and requirements of the consumer. It requires the organisation to
bring innovation and commercialisation in its products by making modifications in the existing
products or by adopting different practices and methods to develop new offerings (Ahn, Minshall
and Mortara, 2017). This report is based on Essence Drinks which was founded by Akshay
Kumar and launched the company by introducing healthy mango lassie in the UK market, but
due to high level of competition company bring innovation in its products by introducing papaya
honey lassi so as to target larger customer base and gains maximum profitability.
This project will throw highlights on benefits of bringing innovation in company's
products and how organisational vision, leadership and culture shapes innovation and
commercialisation. It also explains 4p's of innovation and analyses how frugal innovation is
used within the organisational context. Moreover it also discusses the process required to
commercialise innovation and the range of methods for protecting knowledge and ideas within
the organisation.
TASK 1
P1 Explain innovation and determine its importance to organisations in comparison with
invention
Innovation is the process of application of new ideas and thoughts into development of
products to meet the demands of the customer and to gain competitive advantage. In order to
gain competitive advantage and increased sales, Essence Drinks brings innovation from healthy
lassie to papaya honey lassie to maintain its sustainability. Hence Invention is the process of
developing a new product or a service which is not existing in the market by adopting different
tools and technology. This process is quite risky for small business such as Essence Drinks and is
a costly process (Ajagbe and et. al., 2015).
Importance of Bringing innovation within organisation
When Essence Drinks brings innovation in its products, there are various benefits
associated within the organisation, which are discussed as follows-

 It allows the respective company to gain the competitive advantage as by providing the
products to the customer according to their requirements and meet up their satisfaction
level.
 Innovation brings small continuous improvements in the Essence Drinks products which
assist business to maintain its sustainability in the competitive business environment,
rather than inventing a new product which would be costly for small business.
 It adds value to the existing products within the respective company and helps to different
their product those from competitors and increase the perceived value of the products in
the market and in the minds of customers, therefore enhancing profitability and
productivity within the organisation (Reasons Why Innovation Is Critical To Businesses,
2019).
Therefore bringing innovation in the business helps the company to gain competitive
advantage and requires less resources and funds as compared to inventing totally a new product
in the market.
Comparison of Innovation and Invention
Basis Innovation Invention
Concerned Innovation is concerned to
bringing changes or
modifications in the existing
products of the company.
Essence Drink has brought
modification from healthy
mango lassi to papaya honey
lassi and meet the demands of
the customer, rather than
inventing a new product in the
market.
Invention is the process of
developing a totally new
product in the market by
adopting new production and
technologies so as to meet
demands of the customer.
Skills required Managerial and Strategic skills
are required by the managers
to develop a new product.
Scientific skills are required by
the manager to invent a new
product.

Risk There is little risk associated
with innovating papaya lassi in
the market by Essence Drink,
rather then changing the
product line.
Inventing a new product by
Essence Drink would a risky
activity as risk of whether the
new product will meet
demands of customers or not.
P2 Explain how organisational vision, leadership, culture and teamwork can shape innovation
and commercialisation.
Harmonious organisational culture, proper leadership style adopted as well as team work
environment shapes innovation and commercialisation within the respective organisation and
assist to gain competitive advantage. It also assist the company to bring continuous
improvements in their products and add value to the products. It is discussed as follows-
Vision- Vision of the Essence Drinks includes providing fresh quality lassi to its
customers to provide them a healthy life style and a delightful experience. This needs the
company to innovate its products to provide customers with enriching experience and thus
commercialise the product in the market to gain competitive advantage. Moreover employees
within Essence Drink should be clear about organisation vision so as to develop ideas and
suggestions regarding innovation of its existing products (Azarmi, 2016).
Leadership- There are different types of leadership style such as democratic,
authoritative, participative in which leader at Essence Drink should adopt to participative
leadership styles and encourages employee's participation so as to come up with new ideas and
suggestions and shapes innovation and commercialisation within respective organisation.
Teamwork- Managers within the respective organisation should form team consisting of
various members and should be allotted specific task to completed within the time frame. Team
work at Essence Drinks leads to collaborative working which allows the employees to share
proper ideas and suggestions and shapes innovation and commercialisation within the respective
company (Dodourova and Bevis, 2014).
Culture- It is the norms, values, and behaviour of the employees which assist them to do
work according to the prevailing culture at Essence Drinks. Employees working in the respective
organisation are from diverse backgrounds has different attitude and values towards the work,
there it is the duty to manager at Essence Drink to create a harmonious work place culture where

employees can freely share ideas and suggestion and leads to innovation and commercialisation
of products within the respective company.
M1 Analyse different sources of innovation, and how organisations can foster and develop an
environment and culture of innovation
Different sources of innovation include changes in perception of the customer, new
knowledge and ideas of the manager, industry and market structure change will allow the
manager within the respective company to develop new ideas and knowledge and convert them
into the development of new product. This will maintain growth and development of the business
as well as fosters effective culture within the organisation so as to encourage employee' s ideas
and suggestions (Fuertes-Callen and Cuéllar-Fernández, 2014).
D1 Critically analyse how innovation is developed, embedded and measured in an organisational
context
Innovation should be brought in the organisation so as to meet the existing market needs,
moreover it could be analysed by measuring the past performance of the organisation with the
current performance so as to know whether innovation is bringing success to the organisation or
not. Therefore if the innovation of papaya honey lassi is introduced and benefiting the customers
it helps the company to embedded the innovation successfully.
TASK 2
P3 4Ps of innovation and use of innovation funnel to examine and shape innovation ideas
4 p's of innovation or innovation mix is developed by John Bessant and Joe Tidd. This
model consists of 4 p's such as Product, paradigm, process and position adopt by the organisation
assist to bring continuous improvement in the business. This tool adopted by the manager at
Essence Drink allows them to make possible improvement within this 4 p's and allows the
company to gain competitive advantage. It is described as follows-
 Paradigm- This factor determines that all the changes made within the respective
organisation doesn't always lead to benefit the business. Therefore changes should be
adopted within the business practices after analysing each aspect associated with it, hence
maintains its sustainability (Katzy and et. al., 2013). For example when the manager at
Essence Drink identifies the need for bringing innovation of papaya honey lassie so it

should analyse all the factors associated with bringing innovation so that innovative
factor can be sustained in the market for a long time period.
 Process- Process includes the requirement of hiring and selection of workforce for
innovating its papaya honey lassie as well as analyse the need for training so as provide
innovative offering to the customers.
 Product- Product is concerned to the features and the quality, whether it is able to meet
the demands and the requirements of the customer. Therefore in order to gain competitive
advantage and improve its sales respective company is innovating mango lassie to papaya
honey lassi in order to meet the customer demands and maintains sustainability in the
market (Khan and et. al., 2014).
 Position - It is concerned to position of the innovative product in the market and
differentiate it from those of competitors. Managers at Essence Drink should identify
different ways of positioning its products and frame appropriate appropriate strategies to
gain competitive advantages.
Innovation Funnel also acts as a revenue funnel and sales funnel which enables the company to
have a constant stream of ideas and screens and choose the most viable idea to provide
innovative offerings to the customers and helps them to sustain in this competitive business
environment. Below are the steps which describes how innovation funnel shapes innovative
ideas within the respective organisation-

 Opportunity Assessment- Under this stage manager at Essence Drinks identifies the
available opportunities in the market place and develops the idea out of it so as to provide
innovative offerings to the customer.
 Insights based Ideation- Based on the identified opportunities, it requires manager at
Essence Drink to choose the most viable idea which has the capability to provide
products to the customer according to their demands.
 Conceptualisation- Under this step, manager at Essence Drink conceptualises the whole
business idea stating the financial requirements, resources and time required time in
Illustration 1: Illustration 1: Steps of Innovation Funnel, 2018
(Source): Steps of Innovation Funnel, 2018

developing and innovating papaya honey lassi in the market (Kutvonen, Savitskaya and
Salmi, 2014).
 Evaluation and Benchmarking- After the product has been developed, it is necessary
for the manager at Essence Drinks to evaluate the product that it is made as per the
customer demands and requirements.
 Go/No Go- After evaluating the product, manager at Essence Drinks decides whether the
product should be launched in the market or not.
 Launch- When the innovative product meets the quality standards, then it decided to
launch papaya honey lassie in the market.
This is how innovation funnel shapes innovative ideas within the respective organisation.
P4 Explain developments in frugal innovation and provide examples of how it is used in an
organisational context.
Frugal innovation is the process of reducing complexities and errors in the production of
goods. In context to Essence Drinks frugal innovation assist the company in reducing wastage
and errors in innovating papaya honey lassi and thus helps in removing the non essential features
from the product.
Finding Opportunity in adversity- In order to sustain in this competitive business
environment it is necessary for managers at Essence Drinks to find and grab the available
opportunities in market place. As the respective company has bring innovation in its products by
providing papaya honey lassi in the market, it will assist them to increase its sales and
profitability as well allow them to target larger customer base.
Example- In the competitive business environment, sale of Essence Drink products were
reducing due to high level of competition, this led the company to innovate its products from
mango lassi to papaya honey lassi so as to provide healthy lifestyle to the individuals and
maintains sustainability.
Do more with less- Frugal Innovation assist the company to bring innovation in its
products by using the less as well as the existing resources so as to achieve better results and
productivity within the respective organisation. Essence Drink has bring innovation in its
products by using its existing or core product lassi by adding papaya and honey flavour to its
product, thereby providing customers healthy life style and gains competitive advantage by
providing products according to customer demands (Mazzarol, 2013).

For example- New innovative product should be provided in small tetra packs so that meet the
demands of all the customers and thereby this innovation can be made using core product lassi
and ultimately leads to high sales for the company products.
These are the development within the frugal innovation assist in the growth and success
of the business.
M2 Analyse and apply the innovation funnel in an organisational context.
Innovation Funnel assist the respective organisation to screen and select the most viable
idea from the range of alternatives, this model allows Essence Drinks to identify the available
opportunities in the market place as well as determines customers demands and requirements as
well as also evaluates the product, if it meets customers needs and requirements and therefore
leads to the innovation of papaya honey lassi in the market.
M3 Evaluate the role of frugal innovation in an organisational context.
Frugal innovation assist Essence Drinks to reduce complexity and errors within the
production process and thus allows the company to properly innovate its products and enhance
their brand image in the market. Frugal innovation is used within Essence Drinks to innovate its
lassi product by using its core product optimally and thus by adding flavours to its existing
product it assist company to enhance its sales and gains competitive advantage.
TASK 3
P5 Importance of commercial funnel and process of New Product Development for innovation
Commercial funnel
This is also known as sales funnel, it is a process of defining the services through various
marketing stages to make the people aware about the products. It focuses on the journey of a
stranger and converts that by retaining them as a consumer.
Importance of commercial funnel
 It enhances sales of the company products by adopting the most appropriate marketing
strategy.
 It also allows the company to gain competitive advantage towards its competitors and
properly provide products according to customer demands.
 It also helps in enhancing and improving the business growth by choosing the appropriate
pricing strategy and assist in enhancing brand image and sales of company.
.

New product development refers to the introduction of new product to satisfy the consumers.
There are various ways to develop a new product such as:
Idea generation: This refers to the initial stage where an organization generate new ideas
by external and internal analysis of competitor, suppliers and consumers to enter in the new
market. papaya honey lassie is introduced to satisfy the consumers with profit motive and to
capture the market share.
Idea screening: The next stage of new product development is picking of the most
valuable idea out of many which is different from others. The screening is done on the basis of
profitable ideas papaya honey lassie is a healthy drink which will help the company to rise its
market. The poor ideas should be rejected by the companies at the beginning in order to achieve
the success.
Concept development and testing: At this stage the idea of papaya lassi of Essence
Drink will be further tested with demand for the lassi in the market. The analysis of preferences
given to salt lassi and sweet lassi will be the basis to differentiate the customers taste.
Marketing strategy development: It refers to the development of strategies to launch
the product in the market which will effectively go in the consumers mind. The papaya honey
lassi's Marketing development strategy includes the price strategy, profit projection, long term
and short term sales seasons wise (Pellikka and Malinen, 2014).
Business analysis: This stage is the last stage before product development here the
business is totally examined with the factors such as price, competitors, demand, taste and
preferences of the population. Papaya honey lassi is a beverage and a healthy drink but there are
many drinks available in the market which can compete with lassi so to maximize the sale,
business analysis is compulsory.
Product development: At this stage the new product is developed in the market with the
help of research and development to maximize the profit and to satisfy the consumers. According
to R&D papaya honey lassi was seen as customers demand and then it is developed with the
purpose to satisfy the needs.
Commercialization: it is the last stage of product development where the product is
introduced in the market and to promote the product, various strategies such as awareness of
product to increase sales.

P6 Innovation Business Case
Business Case is normally developed during the early stages of the product and outlines
the necessary details which is worthwhile continuing the project. This business case is about the
Essence Drinks company which has brought innovation in its products by adding papaya and
honey flavour to its core product lassi so as to meet customer demands and increase profitability
and productivity.
Executive Summary - In order to sustain effectively in competitive business
environment, it is necessary to bring changes in the existing products of the company and thus
sustain effectively. This business case is about introducing papaya honey lassi in the market so as
to provide differentiated product and gains larger market share.
Mission- Mission of the Essence Drink is to provide good quality flavoured lassi so as to
meet the demands of the customer and providing them a healthy lifestyle (Plewa and et. al.,
2012).
Resources- In order to bring innovation Essence Drinks requires adequate resources such
as adequate amount of finance, skilled employees as well as funds required for purchasing the
raw materials and processing the business activities.
Market Assessment- In order to perform business activities effectively and provide the
products according to specific needs of the customer, for this marketing analysis should be
conducted by the manager to analyse the level of competition within the competitive market
place and effective strategies should be formulated in order to sustain competitively in market
place.
Financial Assessment- For properly introducing innovative products in the market,
Essence Drinks requires adequate amount of funds such as £30,000 to introduce new product in
the market.
Sources of Funds- There are different ways through which respective company can raise the
fund are as follows-
 Respective company can get funds from banks and other financial institution at a lower
rate of interest and can properly conduct the business activities in a proper manner.
 Respective company can also acquire funds from their relatives and friend and there is no
specific time for repayment and hence can function business activities in a proper
manner.